The Best Financial Habits To Learn From Accountants

Accountants are professionally trained to help others manage money. So, it’s safe to say there are some wonderful financial habits to be learned from those who have chosen this career path. Now, we may be tooting our own horns here but we’re okay with that. We’ve gathered some of the best financial tips from the Harrington Group team members to share with you. So, if you’re ready to get your finances in order and have your money working for you, try adopting some of these healthy habits TODAY!

BUDGET BUDGET BUDGET

Managing your money without a budget is like cleaning a house in the dark. You can’t really see what’s going on and you may or may not be making an impact. It’s not completely worthless but it’s definitely not going to end up in optimal condition. Creating a monthly budget is like shining the lights on your spending and the breakdown of what happens with your money.

A budget is all about wants verses needs. Once you understand exactly how much “extra” money you can allot to things like eating out at restaurants, buying clothes, purchasing tickets to concerts, or engaging in any other recreational activities that cost money, you can combat the common issue of overspending on things that you “want” but don’t “need”. You should prioritize paying bills, getting gas, buying groceries, and saving some extra funds for unexpected expenses such as car troubles or medical bills.

COMBAT IMPULSE PURCHASES

An accountant is always cautious about expenditure that wasn’t budgeted for. A budget should help tackle the financial downfall that is impulse purchases, but it may not be enough. As humans living in a heavy consumer society, we are constantly bombarded with advertisements that act as temptation to spend (unnecessary) money. We get an urge that feels much like an itch, to buy something that we didn’t even know we wanted, until the second it is presented to us. So, how can you stop yourself from giving in to these urges??

Try setting up a procedure for yourself to follow each time you get the urge to impulse buy. A good rule of thumb is to wait it out. How about 24 or 48 hours to think about your potential purchase? This should allow enough time to let the initial allure ware off, so that you may come back down to earth. After your waiting period, if that purchase is still on your mind and feels equally as important as the initial urge, then go for it. As exciting as a purchase can feel in the moment, it can frequently turn out to not be all that important.

OUTSIDE ACCOUNTABILITY

An accountant’s job is to work with people and/or businesses to help manage their money and keep them on a good track. This outside accountability works for a reason. A budget is a wonderful place to start. However, the issue with budgeting is that it relies on individual accountability, and no one is perfect. In the same way that we hire personal trainers or link up with work out buddies to keep our physical fitness on track, we can benefit from hiring an accountant or using the buddy system to keep our finances in check. If you are not in a place where you can afford an accountant, try using to this buddy system to secure a source of outside accountability. This person could be your significant other, a close friend, a family member or even a business partner. You share financial information with each other, run large purchases or impulse purchases by one another before pulling the trigger and generally watch over the other person’s financial goals to make sure they are moving towards them. Sharing the excitement of getting closer to your financial goals with someone you are reciprocally supporting is a big motivational factor.

AUTOMATE YOUR FINANCES

Do you often forget to pay your bills on time? Do you get hit with late fees, even if it’s just a little here and a little there? These can add up over time! Enabling automatic bill pay for monthly recurring bills came be a game changer. We all have hundreds (at least) of small decisions to make each day and so many things to keep track of. Give yourself a break and take this task off your plate. It’s one less thing to think about and it saves you money on pesky late fees.

USE CREDIT WISELY

Credit cards are a double-edged sword. You may think, don’t I need to use credit cards to build my credit score? To a certain extent, yes. Although your score will also be built in other ways – paying off a car loan, paying off student loans, paying your bills on time, etc. Responsible credit card use will benefit you, but it must be managed wisely. Keep it to a minimum. Maybe you only have one credit card. You pay it off ever month and don’t use it for big purchases that you know you cannot pay off. Avoid racking up high-interest debt by avoiding purchases that you can’t financially handle in the moment.

Even better, switch from credit to debit. Debit cards have a natural stopping point for your spending. A more realistic sense of finances. When your account runs out of money, that’s it!

START INVESTING

Does your money just sit in your bank account(s) every month, doing nothing for you or your future? You would benefit from taking care of your future self by investing for retirement and other future needs. Many employers will offer employees a match on their contributions to an employer-sponsored retirement plan. If this isn’t an option for you, you should still be investing. Open up on IRA or Roth IRA and make contributions regularly.